Fitch, one of the most prestigious international rating organizations, has reaffirmed Armenia’s long-term foreign currency sovereign debt rating of “BB-” with a stable outlook.
Maintaining the rating is based on the country’s robust macroeconomic and fiscal policy framework, guaranteed by access to finance from international lenders and the support of the International Monetary Fund.
However, the rating organization notes problems in the subsection “Global risks” of the article.
According to Fitch, Armenia’s economy is highly dependent on Russia regarding trade and energy, and significant diversification from Russia is expected for a while.
It is emphasized that relations between Armenia and Russia remain strained after the alleged non-fulfillment of peacekeeping obligations in Nagorno-Karabakh, and Armenia continues to impose Western sanctions against Russian entities in its banking sector. However, since 2021, exports of goods to Russia have increased by almost 300%, with Russia accounting for 51% of exports and 30% of imports in the 1st to 3rd quarters of 2023.
Fitch also highlighted the persistence of geopolitical risks between Armenia and Azerbaijan, noting that several contentious issues remain between the countries, including the construction of a land link between Azerbaijan and its exclave of Nakhichevan, which would pass through Armenian territory, and border demarcation issues in some regions.
